The Maine Office of the Public Advocate has proposed a new mechanism to encourage the development of solar energy capacity in the state.
Under Maine’s existing law, customers with onsite generation may choose “net energy billing” treatment. Similar to “net metering” policies in other states, Maine’s program gives eligible consumers credit for the power they send back to the grid from their onsite generation. Presently, the value of that credit varies with the applicable retail electricity rate.
But according to the Public Advocate, Maine’s version of net metering raises concerns including net metering customers’ uncertainty over the future value of power, the potential for cost-shifting to non-net metered customers, and a lack of transparency.
In its white paper, “A Ratepayer Focused Strategy for Distributed Solar in Maine”, the Office of the Public Advocate offers an alternative to Maine’s existing net metering program. It envisions policies to support development of two types of solar energy projects in Maine: customer-sited systems and wholesale systems.
For customer-sited systems, the white paper proposes a “Solar Standard Buyer” to serve as an aggregator of the attributes solar energy can provide. Customers would enter into a Customer-sited Solar Contract or CSC, a fixed-price, 20-year contract with the solar aggregator. As under Maine’s existing net metering structure, the “payment” to customers would be based on a per kWh rate that would appear as a monthly bill credit on the customer’s bill. Under the Public Advocate’s vision, the level of compensation would be capped at $0.20/kWh.
As more solar capacity comes online in Maine, the Public Advocate proposes incremental “step downs” in the CSC contract price paid to solar customers. Both the payments to customers under a CSC and the revenues received through this aggregation and sale would be credited to all customers through transmission and distribution utilities’ existing stranded cost mechanisms.
For wholesale systems between 1 megawatt and 5 megawatts in scale, the white paper envisions that the Commission would solicit competitive bids, with the ultimate purchaser being the Solar Standard Buyer. The white paper notes an expectation that economies of scale will enable these larger, utility-side solar projects to reduce the price per kilowatt-hour to Maine’s non-participating ratepayers. It proposes to compensate developers of wholesale systems at a fixed rate, with contracts procured by the state’s utilities through bi-annual competitive processes.
The Public Advocate suggests that its proposal is consistent with recent analysis of the value of solar energy in Maine. Pursuant to the 2014 “Act to Support Solar Energy Development in Maine”, the Maine Public Utilities Commission developed a methodology for determining the value of distributed solar energy generation in the state. Its Maine Distributed Solar Valuation Study, released this spring, provided a methodology for estimating the cost and benefits of solar, values for each cost and benefit, and options to encourage solar adoption within Maine’s existing utility framework.
According to the Public Advocate’s white paper, its proposal could drive up to 300 MW of new solar capacity in Maine by 2025. It has been characterized as an addition to net metering, not a replacement. But the Maine Public Utilities Commission continues to evaluate Maine’s solar energy policies. Its process could have outcomes ranging from continuation of Maine's net energy billing programs to the creation of some new mechanism to address solar and distributed generation's integration into the grid.